Written by Amaury de Barros Conti, Partner | Vice President Investments
WHAT MOVED MARKET LAST WEEK
Markets generally demonstrated resilience, recovering from early volatility as investors balanced rising inflation pressures, evolving geopolitical developments in the Middle East, and continued strength in capital markets activity. Encouragingly, equity performance appeared to broadened beyond mega-cap leadership, while credit markets remained stable, implying underlying confidence despite a more complex macro backdrop. Against this environment, investors continue to weigh the durability of growth, the trajectory of inflation, and the potential implications for central bank policy. U.S. equities finished modestly higher, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all advancing approximately 0.6%–0.7%, as per Bloomberg data.
Source: Bloomberg Finance as of June 12, 2026.
- The strong debut of SpaceX, closing up 19% on its first day of trading, reflected continued investor appetite for high-profile growth stories, regardless of valuation concerns. However, dispersion beneath the surface remains elevated, with hedge funds indicating increasing division on whether to maintain exposure to the artificial intelligence-driven rally or position defensively given stretched valuations and macro risks.
- Geopolitical developments in the Middle East remain a central driver of market sentiment. Announcements pointing toward a potential diplomatic breakthrough between the U.S. and Iran, alongside an interim agreement to reopen the Strait of Hormuz, appeared to help stabilize risk assets and ease some commodity volatility.
- Inflation remains a key focal point. U.S. CPI rose 4.2% year-over-year in May, accelerating from April and reaching its highest level in over three years. The increase appeared driven primarily by energy prices linked to geopolitical disruptions, while core inflation remained relatively contained on a month-over-month basis.
- This dynamic may complicate the Federal Reserve’s policy path. While current policy settings may be viewed as modestly accommodative, near-term inflation risks—particularly from energy and second-order effects such as transportation and food costs—could keep the Fed cautious. Markets are increasingly focused on whether policymakers may need to revisit tightening later this year, particularly if inflation proves more persistent than expected.
LOOKING AHEAD
- The coming week will be critical in shaping near-term market direction. The Federal Reserve’s June meeting, and, notably, Chairman Kevin Warsh’s first press conference, will be closely scrutinized for signals regarding the policy outlook and tolerance for above-target inflation. Upcoming economic data, including retail sales and housing activity, will provide additional insight into the strength of the consumer and broader economic momentum.
- Geopolitical developments will also remain in focus, particularly progress toward formalizing agreements in the Middle East and discussions at the G7 summit.
Amaury de Barros Conti
Partner | Vice President Investments
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